Financial Assistance Scheme to cover certain pension schemes
‘The Financial Assistance Scheme shall cover those pension schemes which have registered with the Department for Work and Pensions by 1st January 2008 and which would have been entititled to assistance by either the FAS or the PPF but for decisions taken by the company sponsoring the pension scheme or by the Trustees of the pension scheme where the insolvency event occurred before the setting up of the PPF but the winding up occurred after that date.’.—[Mr. Flello.]
I beg to move, That the clause be read a Second time.
I will not detain the Committee for more than a minute or two, especially as you have been kind enough to exercise your discretion in calling my new clause, Sir Nicholas, for which I am most grateful.
There is a small group of schemes, which my hon. and learned Friend the Minister mentioned on Tuesday, that fall between the financial assistance scheme and the PPF. Those schemes, such as that of Desmond and Sons, are ones where the employer went insolvent before April 2005, meaning that the PPF does not apply, but where winding up, for whatever reason, was delayed until after April 2005, meaning that the schemes fall outside the criteria for FAS assistance. A technicality has caused the problem—I think that I am safe in assuming that it was not the Government’s intention to exclude such schemes when the FAS was set up. They are occupational schemes, just like others caught within the FAS. The only difference is the date of winding up.
Without detaining the Committee much further, it is fair to say that such circumstances would not have been foreseen at the time. It was not reasonable to have expected pension schemes to wind up later than the employer’s insolvency, yet we know that such schemes exist. Pensioners are not getting either the pension for which they paid into the scheme—the pension they expected to get—or any help, which is a massive problem for the pensioners involved. A small number of schemes are affected, and I understand that they have a mainly small numbers of members, so I presume that the cost of putting this right will be equally small. However, it is an extremely vital issue for those people concerned with, or caught up in, such a situation.
The FAS was designed to help underfunded occupational pension schemes that started winding up between 1 January 1997 and 5 April 2005. The Pension Protection Fund was designed to help occupational pension schemes that were left underfunded when their employer went insolvent from 6 April 2005 onwards. The new clause refers to a small group of schemes that fall between the FAS and the PPF, where the employer went into insolvency before 6 April 2005, but, for many reasons, the pension scheme, although underfunded, did not start winding up until after that date.
A small number of schemes are affected. We know of three at the moment: Desmond and Sons, which is based primarily in Northern Ireland but also in the UK; Stanley Press Equipment; and Pinney’s. If we are to deal with the issue, it would be useful to know whether any other schemes are affected. It is an anomaly that those schemes are not covered and I want to look at that in more detail.
I am sympathetic to the claims put forward by Members who have made representations, including my hon. Friend. We recognise that some scheme members have suffered pension losses through no fault of their own, despite their employer acting legally. I am hopeful that we might find a way to assist them. I cannot give a guarantee at this point, but I encourage my hon. Friend and his colleagues who have been pressing me to continue to do so in the hope that we can find a way to resolve the issue. I hope that he will feel able to withdraw the motion.
I am grateful to my hon. and learned Friend for his comments. I am reassured that the important issue is being looked at seriously by him and his Government colleagues. While colleagues might seek to bring forward similar amendments to the Bill on the Floor of the House, I beg to ask leave to withdraw the motion.